Executive Summary: DOP market prices continued to reach new year-to-date highs, but transaction volumes lagged behind. The upward momentum was short-lived; with weak buying interest, prices pulled back. Despite the correction, monthly losses for producers narrowed, and operating rates remained relatively stable.
In early September, rising crude oil prices drove up the costs of 2-ethylhexanol (EHA) and phthalic anhydride (PA), with PA witnessing more significant gains. Supported by increased raw material costs, DOP prices continued to climb. During this rally, market transactions remained relatively stable, with major producers adopting tiered pricing strategies and controlling shipment volumes to manage supply. This price increase was driven not only by cost-push factors but also supported by fundamentals in spot trading. By mid-September, delivered prices for DOP in Jiangsu Province reached 10,800 yuan/ton, marking a new high for the year.
However, after prices surged, downstream end-users showed strong resistance to high levels, prompting traders to take profits and offload inventory. Subsequently, influenced by geopolitical factors, crude oil prices retreated. With low buying sentiment in the DOP market, the high-price trend proved unsustainable, leading to a shift toward volatile consolidation and price corrections.
Effective support from spot transactions pushed the central tendency of DOP prices higher. At times, product price increases outpaced the cost rises of raw materials EHA and PA. Consequently, processing margins for sample producers recovered slightly in mid-month, shifting the industry from previous losses into a marginal profit zone. As of September 20, DOP profits in Jiangsu stood at 63 yuan/ton. While the industry maintained overall marginal profitability, profit margins remained thin, offering limited incentive for production expansion.
On the supply side, industry capacity utilization rates remained relatively steady. Enterprises flexibly adjusted production loads based on their own order books and inventory levels. Throughout the month, capacity utilization hovered within the range of 53%–56%, with no notable concentrated maintenance shutdowns or aggressive load increases. Although spot supply in East China was slightly tight in early September, commodity supply began to recover as new orders declined.
Raw Materials: Spot trading activity for upstream inputs EHA and PA is gradually weakening, with bearish sentiment rising. Raw material prices face downward expectations, thereby reducing cost support for DOP.
Demand: Downstream product manufacturers exhibit typical "buy on rises, sell on falls" behavior. Following the recent price surge, end-user resistance to high-priced goods persists. Procurement remains largely driven by immediate needs ("just-in-time"), with weak willingness for proactive restocking. Additionally, with the upcoming Mid-Autumn Festival and National Day holidays approaching, downstream factories are planning phased reductions in operations or temporary shutdowns, resulting in a lackluster pre-holiday stocking atmosphere.
Supply: Major DOP suppliers tend to front-load shipments and accelerate delivery schedules before the long holiday. This strategy aims to speed up cargo turnover and mitigate risks associated with inventory accumulation and warehousing during the break.
Considering both cost and demand factors, short-term DOP prices are expected to see slight softening.
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